Zee Entertainment Enterprises quarterly profit fell 38% as FIFA World Cup-related costs offset gains
India’s Zee Entertainment Enterprises reported a 38% drop in quarterly profit on Friday, as costs related to the FIFA World Cup broadcast and other initiatives offset gains from subscription growth.
• The broadcaster's consolidated profit fell to 478 million rupees ($5 million) for the July-September period, from 765 million rupees a year earlier
• Higher advertising and promotion spending would likely pressure Zee's core profit margins, Elara Capital analysts said in a pre-earnings note
• Zee said its programming and advertising expenses grew on account of FIFA, expanded content offerings and investments in other initiatives
• Overall expenses rose 16%, pushing down core profit margins to 3.2% from 7.4% last year
• Subscription revenue rose 30%, helped by FIFA and a strong content pipeline driving subscriber growth
• Zee’s traditional television business has come under pressure over the years as advertisers have been shifting spending towards digital platforms
• Zee has been diversifying, investing in areas such as a streaming platform, sports broadcasting and vertical-video micro-dramas
• Advertising revenue, a mainstay for broadcasters, stayed flat, though Zee said the upcoming festive season should help
• Total income grew 12.6%
($1 = 95.0250 Indian rupees)